PM advocates further deregulation of fuel prices; virtually rules out hike roll back

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Unfazed by ally Trinamool Congress' threat of even withdrawing support, Prime Minister Manmohan Singh today virtually justified the hike in petrol prices, saying there should be further movement towards deregulation of fuel prices.

Addressing a press conference after the G-20 Summit here, he said the market should be allowed to follow its level.

"Well that is the general direction in which we should move. I think the move to decontrol the prices is a part of that process.

"But as I said, these are very sensitive areas and I have no hesitation in saying ultimately we must allow the markets to find their own level except for those commodities which are semi public goods," Singh said.

He was replying to a question about the all-round opposition back home to yesterday's decision of oil companies to hike the petrol price by Rs 1.80 per litre and TMC led by Mamata Banerjee even talking in terms of withdrawing support to the UPA government.

"So, the direction of change is clear. We must move in the direction of decontrolling more prices," the Prime Minister said.

Pressure also mounted on the government to roll back the hike with an unusual order from the Kerala High Court, directing Indian Oil and Reliance Petroleum to produce their balance sheets and quarterly reports in three weeks observing that in the last one year there has been at least 40 per cent hike in petroleum products.

A division bench comprising acting Chief Justice C.N. Ramachandran Nair and Justice P.S. Gopinathan said frequent price hike has caused immense hardship to the common man.

"Political parties are making protests. There is no no consumer resistance. They are getting adjusted to frequent hikes. We are concerned about the price hike.

Ignoring state government counsel's stand that the PIL by former MP P.C. Thomas was politically motivated, the Court said politics involves public interest and admitted the petition.

Meanwhile, Banerjee said Congress was dependent on the support of allies like the Trinamool Congress, NCP and DMK to run the government but the allies have been silenced and not not heard in the Cabinet.

Allies like NCP and National Conference also expressed their discomfort with the petrol price hike and sought a reconsideration of the decision.

Even as allies mounted pressure, the oil marketing companies ruled out a roll back of their yesterday's decision but said they would cut the rate if government gives them a directive.

Congress sources indicated that a 'partial rollback' of the hike hike could happen in the next few days after Prime Minister Manmohan Singh's return from G-20 summit in France.

A senior party leader, speaking on the condition of anonymity, said the allies would be consulted after Prime Minister's return.